Life Insurance Embedded Value Evaluation And Applied Research

The study object of this thesis is Embedded Value(EV). Embedded Value is sum of the value of business in force (VBIF) and the adjusted net assets of life insurance company. VBIF is the present value of expected future profits. Evaluation of the VBIF includes profit of the policies during the whole period it in force and fully considers the long-term operation characteristics of the life insurance company. So the EV is a special financial reporting and value measuring tool in life insurance company. In foreign countries, EV has been used to help managing and marking decisions in life insurance companies. In china, it is mainly used to measure life insurance company's value when the company increases its capital and to decide Initial Public Offerings'stock price (IPO) when the company issues stock. Another use of EV is to satisfy the requirement of the foreign companies and the initial public operation of the companies. With the opening of the China insurance industry completely in 2005 year, the domestic companies must face the competition stress coming from international big life insurance companies which are far off better than the domestic companies in capital, management and technology. So the domestic companies should improve their strength entirely to cope with the competition stress. In this process, EV has many advantages. In the course of issuing stock, increasing capital, enhancing solvency, evaluating EV is the crucial step; in the aspects of improving levels of managing and making decisions and implementing value-based management, EV is a very effective tool. While now in china, the study on EV and its use in life insurance companies is fewer, in order to extend the application of EV in china, this thesis focuses on EV and its use in life insurance companies.The EV and its use in the life insurance companies including...